The issue comprises fresh shares worth Rs 3,750 crore besides an offer for sale (OFS) of 18 million shares by the promoters. The issue will result in roughly 14-15% stake dilution and may value the company at around Rs 37,000-38,000 crore ($5.55-5.7 billion), VCCircle estimates show.

The company also aims to raise about Rs 750 crore out of the proposed issue in a pre-IPO placement that will see the firm issuing 9.5 million fresh shares, Lodha said in its draft documents.

The IPO may result in Lodha becoming the second most-valued listed real estate firm in India, closely behind DLF Ltd which commands a market capitalisation of Rs 39,000 crore ($5.9 billion).

VCCircle had reported earlier in the day that nearly a dozen merchant banks were working on the IPO.

Managing director Abhishek Lodha had said last August that the company was aiming for a listing in 2018.

Lodha, which is finishing construction of World One, the world’s tallest residential tower at 442 metres high, had earlier attempted to go public in 2010 and had even received regulatory clearance. However, the plan for the $437 million IPO was shelved owing to unfavourable market conditions.

If all goes according to plan this time, Lodha’s IPO will be the first major real estate IPO in nearly eight years.

Oberoi Realty Ltd, owned by Vikas Oberoi, went public in October 2010 with a Rs 1,028 crore IPO. Its shares now command a market value of Rs 18,630 crore.

The issue comprises fresh shares worth Rs 3,750 crore besides an offer for sale (OFS) of 18 million shares by the promoters. The issue will result in roughly 14-15% stake dilution and may value the company at around Rs 37,000-38,000 crore ($5.55-5.7 billion), VCCircle estimates show.

Use of proceeds

The company will use net fresh proceeds from the IPO to repay Rs 3,300 crore out of its consolidated debt besides an undisclosed amount for general corporate purposes.

The proceeds from the secondary sale will go to the selling shareholders. The company will not receive any of those proceeds.

The company's net debt, after factoring in cash and cash reserves, stood at Rs 17,397.04 crore as on December 2017, as per the draft document.

Lodha Developers was founded and incorporated in September 1995 as a private entity by promoter Mangal Prabhat Lodha. The company began operations in Mumbai by developing affordable housing in the city's suburbs, and later diversifying to other segments and regions in the Mumbai Metropolitan Region (MMR).

The company develops real estate across the residential and commercial sectors in the MMR, Pune and London.

Lodha claims to be the largest real estate developer in India by residential sales for the nine months ended December 31, 2017 and financial year 2016-2017. It had completed projects with developable area of 50.49 million square feet as of December 2017.

In its commercial portfolio, the company develops office and retail projects as income-generating assets on lease model and sale model.

In all, Lodha has 37 ongoing projects, of which 35 projects are in India and two residential projects in London. In addition, the company has 22 planned projects in India.

Under the affordable housing segment, the company has completed housing projects in Thane and Dombivali region of Mumbai. It has sold real estate spanning 20.80 million square feet in the last five years. Affordable housing accounted for Rs 2,751.7 crore or 39.5% of its total India sales in fiscal 2017.

Financials

The company posted consolidated net profit of Rs 565.27 crore for the nine months ended December 2017 on revenue (from operations) of Rs 6,599.52 crore.

Its net profit stood at Rs 584.03 crore for 2016-17 on revenue of Rs 7,926.45 crore.